VARIOUS TRADE AGREEMENTS COULD MEAN GOOD NEWS FOR U.S. DAIRY IN 2020
A
BY GARY LATTA
s this article is being drafted, President Donald J. Trump and Chinese Vice Premier Liu He are in Washington, D.C., signing the long-awaited Phase One trade deal in an elaborate ceremony at the White House. The agreement ends a long, 19-month U.S.-China trade war that has been costly for both sides. During the ceremony, the U.S. and international stock markets were jumping to new record highs. All this was taking place while at the same time impeachment proceedings were underway across town in the House of Representatives. While there is plenty of optimism surrounding the deal, there are skeptics who understandably question whether China can fulfill all its obligations established under the terms. China has agreed to purchase a minimum of $200 billion in U.S. products and services over the next two years. There are four basic areas of focus in Phase One of the agreement, which China has agreed to purchase from U.S. suppliers:
1. Manufacturing purchases will expand an additional $77.7 billion over two years from the 2017 baseline level. The new agreement is for an additional $32.9 billion increase in 2020 and an additional $44.8 billion increase in 2021. 2. Energy purchases will expand an additional $52.4 billion over two years beyond the 2017 baseline level of $9.1 billion. This will be an additional $18.5 billion in 2020 and an additional $33.9 billion in 2021. 3. Services purchases will expand $37.9 billion over two years. The breakdown is an additional $12.8 billion in 2020 and $25.1 billion in 2021 above the 2017 baseline. 4. Agricultural purchases will grow an additional $32 billion over the next two years. From the 2017 baseline of $24 billion, China has agreed to purchase an additional $12.5 billion in 2020 and $19.5 billion in 2021. (continued on next page) NED Magazine | First Quarter 2020 • 13
